As an advertising guy in the Modern Age, I can't tell you how many people
prance through our agency cyber-doors looking for ways to increase their
advertising effectiveness. After I give them the usual Internet-Is-Only-Part-Of-The-Marketing-Media-Mix
speech, they inevitably respond with The Question. The Big Kahuna. The Grand
Inquiry: Can you really make money on the internet?

The answer is definitely yes. Sort of.

If you're really heavy into hype, you probably have this image of pony-tailed
kids in sneakers becoming instant millionaires every half hour. You probably
read about new ventures in the Business Section about new technologies that
will revolutionize the internet and the world as we know it.

Of course, if you're NOT into heavy hype, you probably know that for
every pony-tailed millionaire profiled in the press, there are a few hundred
thousand whose ventures vaporized within 24 months of their publicist's
first published press release. That's about how long it took for sites like
"The Spot" -- once heralded as "the future of entertainment"
-- to slowly wither and die, with nary a cent left in its estate. Hailed
as "the soap opera of the internet", The Spot never generated
anything even close to a profit. Its parent company died a quiet, ignoble
death in early 1997. Two years earlier, to hear the press trumpeting its
creator as "the next Brandon Tartikoff", you'd have thought it
was going to be the next Microsoft. Or at least NBC.

It was more like DOA. And the reason was because almost every internet
revenue model I see is seriously flawed from inception. The truth is that
you really can generate revenue from internet sites. But the way you generate
it comes from where you'd least expect it. It varies by industry -- and
your expectations. It reaches far beyond a mere "alternative channel
for goods and services".

Most internet pundits are still trying to push the "internet advertising
banner" model as a means to generate revenue. I'm here to tell you
that it ain't gonna happen. Not never. Not no how. It's not going to happen
because even if your site actually can attract a few million visitors a
day (which yours will not), every piece of anecdotal and quantitative research
keeps turning up an annoying little statistic that says people don't click
on the banner ads. And when people don't click on the banners, advertisers
don't get visitors to their sites -- which really pisses them off. After
all, if you spent the better part of your work year building a delivery
system that didn't deliver, wouldn't you get a little irritated?

Of course. But that's why you've got to keep your eye on the ball. You've
got to stick to your core business -- but you've also got to make some real
changes.

To make bucks on the internet, you've got to be more than "internet-ready".
Your business has to be primed for the process. And that means more than
letting some college kid design you a home page for $25. It means really
thinking about the ways your business operates -- and how integrating the
internet can enhance those operations.

You really want to know where the bucks are on the internet? Well, I
can tell you where they AREN'T, and that should be your first clue. They
aren't with the huge mega sites. And don't fall for that press hype, either.
Almost all major websites are still running at a loss, with the possible
exception of Yahoo and a handful more.

The REAL bucks are much, much lower on the food chain. Sites you've never
heard of, but are doing quite well, thank you. Sites that were created based
on updated marketing strategies instead of outdated technologies. And when
you think about it, that's makes a whole lot of sense: the businesses driving
internet profitability are mainly managed by small-timers who see the real
promise of the net as free, unlimited access to their marketplace. These
are guys who see the internet as one huge TV infomercial -- and rightly
so. They eschew mass market mentality and focus on niches which are easier
to identify and quicker to dominate. They know their users' quirky loyalties
and buying habits.

And these aren't just the "product" people. The same thing
is happening in the service sector, too.And at the
risk of sounding self-serving, let me offer up my own company as an example.
Because if we HADN'T radically altered our business for the internet, it's
doubtful we'd be in business today.

The name of the game in advertising is quick response. This makes the internet
perfect for clients, but it's totally contrary to the way traditional agencies
are structured. For example, most traditional agencies have a relatively
convoluted communication chain: it starts from the client, to the account
exec, to the media and creative people. Add the tiered chain of commands
for each department, and it's a wonder that anything gets back to the client
within months, let alone days.

We eliminated all those tiers and give the creative/marketing people clear
lines to the client. instead of relying on account people to interpret the
client's input, we retrain our creative to understand the marketing and
we discipline the client to understand the concept of "garbage in,
garbage out." The result is quicker, clearer communication, which results
in quicker, more accurate ads.

By streamlining the input process, over 98% of the first ads presented to
clients get produced. That saves weeks of revision time and gets the ads
out faster.

Technologically, we create everything digitally. There isn't a pencil or
marker to be found anywhere. No mounting boards. Why? Because we create
everything digitally. And by creating everything digitally, we're that much
closer to the final product. No "tightening up" is necessary.
No client surprises or claims of "You never said it was going to look
like that!"

Finally, because we're 100% digital, rough and final concepts -- be they
print, radio or TV -- are easily transmitted to our clients' private web
sites, allowing them to view their work much more quickly and economically.
No Federal Express charges. No overnight or two day delivery.

We're a service sector site. Our site doesn't generate huge volumes of
traffic. There isn't an ad to been found anywhere on the site (other than
the ones we feature in our portfolio). But it is by far the most profitable
marketing investment the company has made since 1986. In fact, the last
quarter of 1997 was the first year in which business generated from our
website outpaced business from all other sources put together.

Our business came in from all over the world, from all kinds of industries.
But the reason it came in wasn't due mainly to the fact that we had a web
site. It came from the fact that we're one of the little guys in advertising
and marketing. Before we ever designed our site, we re-designed our whole
way of doing business: committing to a 100% digital format, restructuring
our client contact and billing procedures -- those were just some of the
operational changes we had to make in order to make the business more efficient
and profitable through internet integration.

I'm glad to say it worked. For us, the minimum ROI has been roughly 100
to 1.

Are there bucks on the internet? Absolutely. But it's doesn't happen
through banner advertising or technology or fashion or fads. It happens
by knowing the animal you're hunting, and more importantly, the weapon you're
hunting with.

Rob Frankel

Rob Frankel is a speaker, consultant and president of Frankel & Anderson,
America's first award-winning, 100% digital advertising and marketing agency,
providing Advertising, Marketing & Killer Creative to clients throughout
the world. You can reach Rob directly at http://www.RobFrankel.com or toll-free (throughout North America) at 1-888-ROBFRANKEL, and see/hear
samples of Killer Creative at http://www.frankel-anderson.com